Posts Tagged ‘Royal Mail’

Royal Mail, Labour conference and the CWU hit list

Sunday 26 September 2010

Tomorrow the Labour party conference will debate a motion from the Communication Workers Union attacking Business Secretary Vince Cable’s plans to fully privatise Royal Mail, and committing Labour to keeping Royal Mail entirely in the public sector.

Meanwhile, the CWU has drawn up a plan of action for campaigning on the ground against the coalition and its MPs. As general secretary Billy Hayes explained at the TUC Congress recently:

“We’ll be going into 71 marginals where the coalition has a majority of less than five per cent. In these marginals we only need to win over five of every hundred to make progress on defeating privatisation.

“We know it’s a big task but we’re helped that all candidates have come out against privatisation.”

Two Lib Dem MPs and one conservative, the maverick Daniel Kawczynski, signed an early day motion against privatisation before the election. But the union is hoping to put more MPs with slim majorities under pressure by linking up with community groups and making the issue about public services under threat.

(On the subject of Royal Mail, Ed Miliband told Labour’s affiliated unions: “I believe that we need to show as a party, including in the case of Royal Mail, that we can modernise and improve public services without resorting to privatisation”.)

(from Tribune blog)


Royal Mail’s great transparency over their new agreement

Wednesday 10 March 2010

Just to be clear, this means no official line on how many jobs will go, whether deliveries will take longer or whether people will lose out after delivery payments are abolished…
From: rene.lavanchy

Subject: Modernisation agreement – questions

Date: 9 March 2010 11:41:37 GMT


|        Subject: Modernisation agreement – questions


Dear xxxx,

Further to my call, here are questions on the modernisation agreement with

the CWU:

1) Regarding ‘Job Security/Managing The Change’ (p8) Although you want to

avoid compulsory redundancies, do you have an idea of how many people Royal

Mail will employ after modernisation is complete? If not, why not?

2) Regarding delivery spans (p23). Does this mean delivery spans will no

longer be restricted to 3.5 hours?

3) Does reducing the length of the working week increase the number of job

losses resulting from this agreement?

4) D2D payments are being phased out and replaced by a weekly flat rate of

£20.60 (p60). Can you confirm this means a pay cut for everyone who

currently delivers more than 1,233 items a week? If not, can you clarify?

5) Regarding full-time vs part-time mix (p8) does this mean an increase or

decrease in the proportion of part-time staff, compared to the current


6) Regarding travel expenses (p11) will they eventually fall for staff who

claim over £1250 a year?

My deadline is Wednesday afternoon but if I could hear back before (at

least as to whether your are able to respond) that would be very helpful.

Many thanks




Subject: Re: Modernisation agreement – questions

Date: 10 March 2010 10:26:14 GMT

To: rene.lavanchy

Hi Rene,

I can confirm that I am unable to give further information outside of that

provided by our news release and the information in the agreement.



Royal Mail Group

Exclusive: Royal Mail deal on the cards

Thursday 25 February 2010

Further to my last post on the subject, I’ve learned that – although both sides won’t confirm it – Royal Mail and the Communication Workers Union’s negotiating team are applying the finishing touches to a modernisation agreement they’ve been tharshing out since the national strike ended last year. You can read about it in this week’s Tribune. As I report :

A source said of the deal: “If it were a purely financial deal, you’d be rolling around laughing at it, but it’s a lot more than that.”

Another source said: “It will deal with the individual industrial issues such as the mail centre network, union issues. They’re at the end of the road. I suspect there’ll be a recommendation to accept. I don’t think people are going to be flag flying in the hilltops. I expect it’s going to be a difficult, complicated proposal.”

The CWU’s postal executive committee have been summoned to a two-day meeting next week where officers will take them over the agreement, and (as I understand) recommend them to agree it. The executive will then decide whether to accept it or not, and if it does, it’ll have to put it to the members for a vote.

So there are still hurdles – but we’re a lot closer than we were a month ago, when the talks were meant to be concluded.

Why has it taken so long? A highly disciplined omertà has been in operation since talks began, so it’s hard to say. However the mood music points towards a compromise that some CWU members may find unpalatable (see above). Although they may (should?) get more money. We shall see.

This agreement is a big, complicated, multi-limbed beast which will almost certainly lead to more automation and Royal Mail shedding jobs, since the CWU is on the record as acccepting the need for job losses. There are all kinds of complex issues around working conditions to resolve. The agreement is not just there to modernise the company, it’s there to prevent another national strike – and that is by no means ruled out yet.

Update: HellMail has some learned reflections on what a Royal Mail deal could mean for both sides.

Royal Mail pensions: the elephant in the post room

Friday 12 February 2010

Talks between Royal Mail and the Communication Workers Union are not going at all to plan.

They were meant to wrap up on 22 January, three weeks ago today, according to independent chair Roger Poole, and they are still continuing without so much as a hint of resolution. Poole is a former chair of Northern Ireland’s Parades Commission and has been praised by negotiators in the Royal Mail talks. So it’s likely to be something substantial that’s blocking progress – like redundancies, replacement of full-time with part-time jobs and the calculation of walks – postmen and women have complained that the walks are too long.

Meanwhile, the issue of Royal Mail’s pension deficit, which the CWU regard as “the elephant in the room”, remains untouched. Outgoing CEO Adam Crozier has suggested the deficit may have reached a record-breaking £10 billion, and it may cost even more to bail out. It could sink the company if the government doesn’t take on the liability. Servicing the deficit is costing Royal Mail £280 million a year – the company is still turning a profit, but the deficit can jeopardise that.

Lord Mandelson promised to do just that, but only as part of a deal including part-privatisation which he argued was necessary to make the company viable in the Internet age. The CWU retorts that the reason for the deficit is past governments taking a massive pension contributions holiday for over a decade.

Anyway, the Postal Services Bill was supposed to resolve the issue, but after it was shelved (news which I broke on this blog last year) both part-privatisation and the bailing out of the pension fund were kicked into the long grass. A motion passed at last year’s Labour party conference, calling on the government to do something about it, hasn’t achieved much. More recently the CWU put out a report on the subject, just here.

Higson vs Unite: Royal Mail’s climbdown over orders to managers

Wednesday 28 October 2009

Last week I did a piece for Tribune about how Royal Mail was ordering managers to do postmens’ (and womens, thanks Enoch Was Right) work for them during the CWU strike. Royal Mail managers are represented by the union Unite. Now I learn it seems they’ve backtracked.

In response to my questions for last week’s article, Royal Mail emailed a statement saying: “Anyone who is not able to work directly in the operation for whatever reason is not required to do so”. A complete contradiction, it seems to me, of managing director (letters) Mark Higson’s words in his letter, to wit:

“You will recall, I wrote to you back in September, explaining that two days’ support per week would be the minimum expected level. The need to provide a service for customers relying on us means this can no longer be optional .”

What changed? Well, Unite’s Paul Reuter wasn’t happy with the order, as I said in my article. Managers have a flexibility clause in their contracts that means they have to cover for lower grade staff, but Higson’s order went too far for the liking of the union, who asked him to rescind it.

Moreover, Derek Simpson and Tony Woodley wrote to their own members expressing solidarity with the CWU this week. Unite members can’t legally take unofficial strike action – there’s no dispute between them and Royal Mail – but it seems they can refuse to do postpersons’ work after a certain point of flexibility.

It seems Royal Mail have decided they can’t win this one. Managers’ cover could never break the  strike on its own – there aren’t enough of them, 12,000 out of 120,000 – but they could have damaged morale amongst the strikers.

The machine behind the Royal Mail strike

Thursday 22 October 2009
Solystic MARS mail sequencing machine (pic: Solystic)

Solystic MARS mail sequencing machine (pic: Solystic)

Sometimes it feels like there’s nobody so ignorant as the British media. There is precious little explanation in today’s papers about what the national postal strike is actually about.

This is one of those whats. On the left is a mail sorting machine made by French firm Solystic. It’s Solystic machines which Royal Mail has been trying to introduce into mail centres, and whose adoption were a key part of the 2007 modernisation agreement. So why haven’t they been rolled out yet? Is it as simple as a Luddite union standing in the way of modern technology?

Er, not necessarily.

Walk sequencing machines are so called because they arrange mail in the correct sequence for a postperson’s walk. Business plans drawn up over a year ago envision rolling out the machines across the country, but a document last year suggests this had to be delayed.

In 2007, the then trade and industry secretary, a certain Alistair Darling, gave Royal Mail a £1.2 billion loan for modernisation. This money still hasn’t all been spent. Royal Mail planned to buy 1000 walk sequencing machines, but they never have. Current plans would only see 33 machines nationwide by April 2010.

Two months ago I reported on Communication Workers Union officials saying that the machines were being mothballed instead of trialled. CWU London divisional rep Mark Palfrey said Royal Mail were having second thoughts over the machines. As he said in my article:

“Do the machines do the job? Yes they do. Do they do it as quick as the current machinery? No they do not.”

“Distance mail [from distant parts of the country] does not arrive in inward mail centres till four o’clock in the morning… That mail would not now land in delivery offices till ten o’clock.”

“Royal Mail is having a debate. That’s clearly what’s going on, hence the attack on the front line postmen to reduce the cost, where they thought machinery was going to do that.”

If the machines are rolled out nationwide, he said, the public will have to get used to getting their mail even later than they do now.

Here’s the thing. Machines mean job losses. The CWU knows and accepts there have to be job losses. What they’ve told me (and I’ve no way of proving this as yet) is that Royal Mail are deliberately failing to consult on modernisation in order to justify a larger scale attack on jobs, and possibly union recognition, occasioned by a painful period of fallout and national strike.

It would be nice to have some sort of answer from Royal Mail to all this. Answer came there none.

Exclusive: Royal Mail sale is off

Tuesday 2 June 2009

There’s been speculation over whether the bidders were putting in a good price, there’s been talk about putting off an auction. But it doesn’t matter anymore.

Last night’s difficult Parliamentary Labour party meeting, plus the House of Commons’ future business papers, make the situation clear: the Postal Services Bill that opens the door to up to half of Royal Mail being sold off, has been dumped from the Government’s legislative programme. Harriet Harman refused to answer questions on the subject, apparently preferring to let the business papers do the talking.

It could come back, of course. But with Labour MPs and activists alike despairing of the party’s fortunes, how soon are they going to revisit such a toxic issue, one that could lose them votes as well as union backing? (N.B. The Communication Workers Union is not likely to vote for disaffiliation at their conference next week however, as the executive is against it.)

What this means for Lord Mandelson, who on Sunday said he was “not for turning” on part-privatisation, remains to be seen. Lindsay Hoyle, one of the MPs leading the fight against mail sale, wryly says: “He’s a very capable minister. Why leave them in one position when you can move them to one that needs fixing?” Reshuffle should be interesting.

Update: I should make clear, the situation according to MPs is that the bill doesn’t appear to be being debated at any point in the next three to four weeks. That takes us to within three weeks of the long summer recess…

Unions love the G20 (is the party line)

Tuesday 7 April 2009

The British press gave the G20 summit a pretty good press on their front pages last week, with words like ‘historic’, ‘hail’ and of course ‘trillion’. Avid readers of this blog will probably have also come across more sober analyses (like this one) dissecting what was agreed, questioning how firm the agreements really were and stripping away the money that had already been promised or given (most of it) from that $1.1 trillion headline figure.

No such reticence from the Trade Union and Labour Party Liaison Organisation, which acts as a conduit for political discussions between the party and its 15 affiliated unions and is based in an office inside Labour HQ. On their recently revamped Web 2.0-enabled website it gives the summit a jaunty high-five: “JOB DONE – now let’s get to work”.

“Gordon Brown’s $1.1 trillion G20 deal looks set to kickstart the worldwide economy,” it continues. No ambiguity about which world leader was responsible for what part of the deal then.

You’d expect TULO to support the Labour Party, and encourage its members to join and vote Labour – which it does; there’s a link to joining the party on its site. But supporting the Labour Government is another matter – just ask the CWU which is threatening to disaffiliate over Royal Mail part-privatisation.

And it’s hard to see anything on the website which diverges from the government line. In the news section, there’s a press release praising Labour MEPs and attacking Tory MEPs for their stance on anti-discrimination measures.

But interestingly, there’s no mention of how – that very same day – talks in the European Parliament on the Working Time Directive, which limits workers to a 48-hour working week, collapsed after Pat McFadden, Labour’s employment affairs minister, refused to budge. The UK’s opt-out is opposed by trade unions and not a few Labour MEPs.

TULO’s line will surely chime with what the more government-friendly union bosses say. Plenty of rank-and-file trade unionists won’t like it, such as Jon Rogers here. He raises the question of how such trumpeting advances the cause of unions fighting for their members’ rights, like those sacked Visteon workers.

This isn’t to say TULO is Gordon Brown’s plaything. It isn’t, and it does seek to lobby the government with union-friendly policies. But you may ask whether it should also appear to campaign on behalf of the same government.

P.S. The new TULO website is built by Blue Sky Digital, whose London bureau chief Matthew McGregor used to be TULO’s communications man (and Jon Cruddas’ assistant before that). BSD are also helping the CWU run their “Keep the Post Public” campaign against the government’s Royal Mail plans. McGregor himself is a loyal Unite T&G member. For now, the firm seems happy riding those two horses.

Hat-tip: Jon Rogers

Is the Labour-union link doomed? A view from today’s demo

Tuesday 24 February 2009

CWU protest, Billy Hayes on left

“If they privatise the postal service, I don’t care who wins the next election, because there won’t be any difference between them.”

Billy Hayes, general secretary of the Communication Workers Union, can be bolshy when he wants to be, but even for him this was tough language.

He said it – actually, he shouted it – at the close of today’s rally against Royal Mail part-privatisation in Westminster, and having just deprecated Labour his next act was to get chummy with a Tory MP. Daniel Kawczynski, the member for Shrewsbury and Atcham, all 204 centimetres of him, had turned up to offer his support, and when he met Billy, the latter cheerfully announced over the PA that Kawczynski was going to sign the early day motion opposing part-privatisation. (He’s also going to vote against the bill – thus defying a Tory whip, he told me.)

This rally was the most explosive display of anti-Government feeling among trade unions I’ve seen, and certain things make me think the Labour-union link is under its greatest threat yet:

1) Billy Hayes’ comments. General secretaries do not dictate union policy, but they can influence how their members vote  when they vote on it at annual conference, not least through “the machine”, the army of full-time officers who are on hand to brief members (or as some see it, twist their arms into voting one way or another). Hayes will not try to stop his members voting to sever links with Labour (when they vote presently).

2) Not to be outdone, GMB general secretary Paul Kenny is threatening to cut off the constituency funding of MPs who vote for part-privatisation. Sound familiar? Yes, he’s threatened it before, as I reminded him when he was on his way out of the building. Yes, and we’ve done it before, he replied. “We’ve got a register,” he added ominously. As Labour plunges in the polls, those funds will be more needed than ever.

3) Cutting off funding to unhelpful MPs is also what Amicus general secretary candidate Jerry Hicks threatened to do when I spoke to him last week. As I hint below, there is a leftward tide in even loyal-to-Labour unions. My sources are worried about those Labour Party affiliation votes at union conferences, which get harder every year.

4) Relations between Downing Street and the unions have hit a new low. After all, if the government’s Warwick promise to keep “a wholly publicly owned” Royal Mail is broken, what price the whole policy-making process? Recently the No 10 political staff met with union reps to ask what concessions would encourage the CWU to drop their opposition to the government’s bill. The answer? Stop part privatisation. And the problem is partly personal: some trade unionists don’t merely dislike Lord Mandelson,  but believe he is hell-bent on systematically destroying union influence on party policy.

5) It therefore follows that no amount of carrots offered by ministers will stop this loud, well-supported, broad-based campaign.

6) And finally. John McDonnell spoke at today’s rally, as did Brendan Barber. That is unusual. The two men don’t often share a platform together – the campaigns they’re associated with have in the past rivalled each other (e.g. Public Services Not Private Profit vs Speak Up for Public Services). But today they spoke as one (well, Barber spoke and McDonnell shouted).

The bill gets published on Thursday in the Lords, where Labour peer Lord Clarke will try to derail it from the start. Battle draws near.

A final thought: A friend of mine with many more union contacts than me suggested a tactic the unions could use. They could go on unofficial strike action, breaking the so-called Thatcherite anti-union laws (as McDonnell suggested today they should do), and then take the fine money out of their affiliation fees. It has a certain seductive simplicity, does it not?

Rene cuts through the crap: Royal Mail and the social fund

Monday 22 December 2008

I’m pissed off. Not because I haven’t done enough Christmas shopping, but because there is a bizarre amount of confusion over current public policy issues hanging in the air at the moment – and because (coincidentally) I haven’t blogged in a while.

I refer to the future of Royal Mail and today’s kerfuffle over loans to poor households. Media discussion has shown ignorance, misdirection and complete surrender – as evidenced when Deborah Summers of said nothing at all about Jim McGovern’s resignation and invited comments instead. I don’t know Ms Summers, I’m sure she is a capable journo and have no wish to be rude, but professional political journalists ought to offer a way through the murky world of Westminster, not invite members of the public to grope their way through. At the risk of sounding monumentally arrogant, perhaps I can help shed some light on the matter.

1) Royal Mail

The resignation of Jim McGovern, PPS to postal minister Pat McFadden, was hailed as the first sign of a Labour revolt over the unambiguous plan to partly privatise Royal Mail. And maybe it is. But as Nick Robinson absolutely rightly pointed out, McGovern had no right at all to pretend to be surprised at the plans.

Pat McFadden is on the right of Gordon Brown’s ministerial team. He’s no friend of the unions (just ask the unions), who oppose part-privatisation*, and was not minded to award the Post Office Card Account contract to the Post Office. If anyone supports more private sector involvement in Royal Mail Group plc (which owns the Post Office), it’s him. McGovern of all people should know that. For pointing this out, Robinson has been worsted by lots of ignorant motormouths. Ignore them.

Anyway – and much more importantly – Labour MPs may feel rebellious (even ex-cabinet minister Peter Hain made a rare intervention over it) but will they get the chance to actually vote against the government? Media reports since the Hooper report was published last Tuesday suggested that it would require an Act of Parliament. I don’t think it would. Full-blown privatisation, yes. But I am reliably informed (as my Tribune story says) that distributing shares to create a minority stake could be done through a legislative tool such as an Order in Council or a Statutory Instrument, which does not necessarily need a vote in either House.

But Parliament would never stand for it, I hear you cry. They’d demand a vote. Not necessarily. Some controversial issues, such as raising of tuition fees and welfare amendments, are left to statutory instruments. And even if there were a vote, the support of the Conservatives and perhaps some Lib Dems would safeguard the bill’s passage. If the Government wants part-privatisation, it will get it. Mandelson is driving it; Brown and McFadden support it.

2) Social fund

 Apparent shock and horror today as journalists woke up to the idea that people could be charged interest on loans as part of a package of measures from James Purnell’s Department for Work and Pensions to reduce the effect of low incomes on social mobility.

The storm has broken out over a DWP consultation paper which suggests that such loans, provided by third-party credit unions, could attract annual interest rates of up to 26.8 per cent. The government, in the shape of anonymous briefings and an appearance from Kitty Ussher, has said they don’t intend to do that.

Is it a bungled response to helping people through the recession, as some people are saying? Er, no. If it’s a bungled anything, then it’s a bungled response to helping people out of social deprivation – i.e. nothing to do with the current economic climate at all. And the effect of raising interest on loans would not be quite as harsh as you might think.

It may well be that today’s headlines have been propelled along by a last-minute volte-face in Whitehall, but these plans are nothing new. In May this year, I was one of two or three journalists who could be bothered to turn up to James Purnell’s speech to the Fabian Society on child poverty, which I covered for Tribune. One of the angles I couldn’t quite fit into my story concerned the extension of credit to poor people, a policy which led directly to that consultation document. Purnell said (my bold type):

We need to reduce the poverty penalty.  As Save the Children showed recently, it costs you more to be poor.  And part of our response to the local elections has to be helping those on lower incomes with the cost of living.  To make sure that every extra pound goes further.

There are many causes of the poverty penalty.  But I want to start with the cost of credit.   Last year, there were 160,000 people relying on loan sharks.  I would like nothing more than to put the loan shark out of business.  They walk the streets of estates in my constituency, often with the latest toy in hand, to dangle in front of children to get their parents to take out a loan. But without dangling the interest rates which can be literally extortionate. One lone shark prosecuted last year was found to be charging rates of between 1500 and 117,000 APR.

We already do a lot to help.  The social fund will this year provide half a billion of interest free finance to people on benefits when they are in need. But the budgeting loans are not currently available to those who have moved into work, and we do not have sufficient resources to offer them to everyone they could help.
I have, therefore, commissioned KPMG to undertake a feasibility study to assess the options available for reform.  They will report by July.  This can be the start of transforming our approach so that we extend affordable lending to everyone.
I want to explore how private and third sector partners can work together with the Government in the delivery of a reformed scheme. I want to see how the money that we have invested in the programme can be made to go further, to offer low cost loans to those who work as well as those who don’t.

Did you see that? He said ‘low cost loans’, not ‘free loans’. Duh. And even a loan at 26.8 per cent APR would be well under what commercial lenders charge. Kitty Ussher said that some loan sharks charge up to 1000 per cent. But see above: some go a helluva lot higher than that.

While on the subject of 26.8 per cent APR, how much would that cost? The DWP’s consultation document helpfully explains: an average-sized loan of £433.30 would incur total interest of £47.80, and take 46 weeks instad of 42 to pay off. Whether that is fair is up for debate; whether it’s ‘loan shark’ behaviour, as Purnell’s Tory shadow Chris Grayling says, is not.

Have I just mounted a staunch defence of James Purnell? Maybe I’ll be sacked from Tribune…

*Unite do not oppose part-privatisation as expressed in the Hooper review. They appear to be in a minority, and needless to say they’re not endearing themselves to the Communication Workers’ Union over this. The TUC opposes Hooper, although their press release nicely pretends that Unite do too.